Interactive effects of market orientation, innovation orientation and sales control systems on firm performance in B2B markets

Abstract

PurposeThis study examines the interaction between sales control systems and firm level strategic orientations and their joint effects on company performance in B2B context. Independent and joint effects of market orientation (MO), innovation orientation (IO) and sales control systems (SCS) on firm performance were analyzed.Design/methodology/approachA quantitative research methodology is adopted to compile firm-level primary data from manufacturing companies located in an organized industrial zone. Research data were collected by face-to-face surveys from 302 sales professionals. The research model and hypotheses were tested by using partial least squares (PLS) structural equation modeling (SEM) with Smart PLS 3.0.FindingsIn addition to confirming the positive effects of MO and IO on performance, data analyses revealed that SCS exert an indirect effect on company performance which is fully mediated by MO.Research limitations/implicationsThe research was limited to a developing country context and research data was collected from a convenient sample of B2B companies by a cross-sectional study. Cross-cultural and longitudinal studies may provide additional insights. Firm level strategic orientations and sales control systems must be examined together in an integrated way to explore their effects on company performance. The individual effects of these structures on business performance may manifest differently when they come together.Practical implicationsResults indicate that the sales control system setup is critical for the implementation of a market-oriented strategy. This study highlights the importance of setting a compatible sales control system to achieve organizational goals in accordance with the strategic orientations which affect the success of particular organizational strategies.Originality/valueAlthough the current literature identifies the independent and joint effects of market orientation and innovation orientation on company performance, empirical studies probing the interaction of sales control systems with these constructs is very scarce. Understanding how sales control systems relate to strategic orientations will help design a more effective sales organization and improve company performance. This study contributes to the literature by promoting additional insights by linking sales control systems with market orientation, innovation orientation and company performance.